Drawing data from a variety of cell lines, the ENCODE project found that more than 60% of the human genome is transcribed, and that the majority of these messages are not translated into proteins and are likely to have regulatory functions. Over two thirds of protein non-coding RNAs are novel and specific to a particular cell type and developmental stage. In this project we will (1) provide a genome-wide catalogue of all known and novel transcripts and their regulatory elements in progenitors and early neurons from the embryonic human frontal cerebral cortex~ (2) understand whether their expression is recapitulated in vitro during neuronal differentiation from induced pluripotent stem cells (iPSC)~ (3) establish the brain specificity of novel and known transcripts nd their regulatory elements by comparing our dataset with those of the ENCODE project, and (4) identify and catalogue those transcripts and their regulatory elements that are in loci previously implicated in schizophrenia and autism. Gene expression of the embryonic brain is different from that of the postnatal brain. The systematic discovery and analysis of all active genomic elements that we propose here for the mid-gestational embryonic cerebral cortex has not yet been performed, neither is planned under the ENCODE tier 3 projects. The selected histone marks and transcription factors will identify a large fraction of enhancers/promoters active in any specific cell type. Only some were previously ascertained in the developing brain. Abnormalities in very early aspects of brain development, and specifically the developing cortex, are likely to underlie the pathogenesis of common neuropsychiatric disorders like schizophrenia and autism. Human genomic variants that have been linked to these disorders often lay in poorly annotated regions of the genome. These variants could play a direct role in disease pathogenesis by modifying the coding regions of novel, non- annotated transcripts and/or modifying transcription factor binding to their promoters/enhancers. Hence, our first priority is to discover, as well as provide a catalogue of such elements. Their functinal role in development must then be established. The iPSC model system offers an opportunity to begin answering the question of whether these novel transcripts may have an important biological effect. However, the validity of iPSCs as a true representational model of neurodevelopment needs to be established by performing a direct comparison of their transcripts and epigenetic regulators with those that are active in neural cells in vio at comparable stages of neuronal development, ideally in the same genetic background. Hence, in this project we will provide the first rigorous validation of the iPSC model by comparing all transcripts and chromatin marks of progenitors and neurons that are derived from iPSC with those that are present in the brain at comparable stages of development. This will allow the future use of iPSCs to elucidate the function of non-coding elements of the genome and their potential relevance to psychiatric disorders.